SE Asia sees mixed cocoa prices

SE Asia sees mixed cocoa prices

KUALA LUMPUR (Reuter): Malaysian cocoa prices were mixed yesterday after an overnight fall in New York's CSCE cocoa futures, but rates were higher in Indonesia amid tight supply, regional traders said.

"The market's been pretty quiet lately...the prices are just a reflection of some adjustment," said a trader in Tawau, the largest cocoa-growing area in Malaysia's eastern Sabah state.

Supply of local cocoa beans has been acutely short in Malaysia since a dry initial harvest for the April/May/June period, local traders said.

Imported beans were making up the shortfall, but demand from grinders was not exactly encouraging, said the traders.

"There is no surprising off-take or pattern consumption...it's pretty stable," said a grinder.

In New York, the CSCE cocoa futures ended sharply lower on Tuesday and towards the bottom of the day's range, pressured by speculative selling. September cocoa fell $29 per ton on the day to $1,510 after ranging between $1,508 and $1,538.

Second-month December closed $29 on lower at $1,559, while the back months also ended $29 lower.

Yesterday, the Malaysian Cocoa Board quoted the SMC 1A grade out of Tawau at 3,500 ringgit a ton ($1,335.9), down 110 ringgit from Tuesday but unchanged from a week ago.

The board quoted the SMC 1B grade out of Tawau at 3,405 ringgit, lower by 155 ringgit from Tuesday but up 45 ringgit from a week ago.

Traders quoted the SMC 1A at 3,550 ringgit and the SMC 1B at between 3,445 and 3,455 ringgit a ton a Wednesday.

In Indonesia, cocoa prices were higher yesterday as players covered positions amid tight supply, traders said.

"Supply continues to be tight, and incessant rains for about 10 days have made it more difficult to get beans," one trader from Ujung Pandang, capital of the key growing region of South Sulawesi, said by telephone.

"Some players are actively looking for beans to fill contracts, and are willing to pay a premium," he added.

Traders said the amount of mouldy beans arriving at Ujung Pandang was increasing because of the rains, which also hindered the drying process.

"Some of the beans are 17 percent mouldy, which is much higher than the acceptable level of four percent," one said. "The mouldy beans cannot be exported because of stringent quality control measures in countries like the United States."

Traders said fair, average quality beans were quoted at 3,350- 3,450 rupiah/kg in Ujung Pandang, compared with 3,300-3,350 rupiah a week ago, and 3,450-3,500 rupiah on Tuesday.